Buying property for best price can benefit from enlisting a particular ally

Auctions and private negotiations can instil a sense of mistrust and caution in buyers when it comes to their interactions with agents, but where is the line between extracting useful information, and showing your cards?

Many people believe that the person who wins the keys at auction has the biggest budget, but that is not always the case.

Buyers and bidders make blunders all the time, and many of their blunders could have been avoided if they’d leaned on the agent for more information.

As a matter of course, agents will discuss the auction campaign, recent comparable sales (including those that result during the campaign in question), and the vendor’s thoughts and expectations with the listing agent.

By the time the auction comes around, we generally have a firm idea of the numbers of buyers we’re up against.

Many buyers prefer to be closed books, but for those who welcome dialogue with the agents, they stand to glean some valuable insights.

Gauging a property’s value

Let’s start with pricing. In our auction capitals, many of us know how unreliable the published auction quote ranges can be.

But finding a chatty and friendly agent who is happy to take the analytical challenge on when it comes to comparing recent sales can be enlightening.

I’ve had plenty of conversations at the door with agents who have cited various sales and happily shared their thoughts in relation to superior, inferior and comparable properties in the neighbourhood.

There will always be the reserved agents who prefer not to discuss pricing, and when this strikes, I find others in the office, (or even opposition agents in the neighbourhood) to discuss the property in question.

Many buyers overlook the fact that most vendors generally ask two or three agents to appraise their property when they are thinking of selling.

These agents who missed out on the listing will likely have some good insights into the property value after they’ve spent time on the appraisal report.

Not only the appraisal, but they’ll also have a reasonably firm idea of the vendor’s price expectation.

It is advantageous to get to know the local agents and feel comfortable discussing campaigns with agents from different companies and offices. They will almost certainly have opinions, and often great first-hand insight.

Weighing up the auction competition

When it comes to evaluating your competition, it’s simple enough to ask, “what is my competition like?”

Many agents will share this information. Some will open their computers and scroll down, counting the green-flagged buyers who have asked for contracts or requested to be kept informed.

Others will start listing them verbally by their first name, with short bio’s.

When I meet an agent who is more closely guarded, I ask direct, closed questions, for example, “how many contracts have been requested?”, or “how many building inspections have been arranged?”

Not every buyer who requests a contract is necessarily going to put up their hand and bid (or negotiate), but a building inspection is a much firmer sign of a potential opponent.

Budget expectations

Depending on the familiarity a buyer has with an agent, sometimes a question such as “what price do you think I need to budget for this auction, given the competition?” This style of question isn’t provocative at all, because the buyer isn’t suggesting that the agent’s quote range is dishonest.

They are actually imploring the agent to give their own opinion of where they feel the bidding may reach on auction day. All of these styles of questioning are harmless and the result can often surprise. 

It’s not always only about price, however.

Terms count for a lot.

Simply asking “what settlement is the vendor hoping for?” can tell a lot about a vendor’s position, depending on the agent’s level of protection for their vendor.

A short settlement may suggest the vendor has bought or has committed the funds to something more imminent.

I sometimes ask, “are there any important things I should note that could appeal to this vendor?”

Whether it be that the vendor is particularly emotional about who buys their house, or whether their transition plans mean they prefer a particular settlement or even a lease-back. I’ve often helped clients secure homes with quirky terms, and this has shifted part of the focus from price to the ease of selling and transitioning to their next home.

Importantly, if a buyer has built a good rapport with an agent over weeks or months, (or even years), the agents do often feel compelled to help them.

A friendly demeanour and a willingness to ask some direct questions can go a long way when it comes to navigating the mystique of auctions and negotiations.

In tandem with a buyer’s own analysis and due diligence, the agent’s intel can be empowering.